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Wisconsin BadgerCare Reform Approval Period: October 29, 2024 through December 31, 2029 Page 32 vii. Corrections to coverage/service estimates where there is no prior state experience (e.g., SUD) or small populations where expenditures may vary widely. n. Budget Neutrality Update. The state must submit an updated budget neutrality analysis with its adjustment request, which includes the following elements: i. Projected without waiver and with waiver expenditures, estimated member months, and annual limits for each DY through the end of the approval period; and, ii. Description of the rationale for the mid-course correction, including an explanation of why the request is based on changes to the state’s Medicaid expenditures that are unrelated to the demonstration and/or outside the state’s control, and/or is due to a new expenditure that is not a new demonstration- covered service or population and that is likely to further strengthen access to care.

11. MONITORING BUDGET NEUTRALITY FOR THE DEMONSTRATION

11.1. Former Foster Care Youth (FFCY) Budget Neutrality. CMS has determined that the FFCY demonstration population is budget neutral based on CMS’s assessment that the FFCY expenditure authority granted for the demonstration has minimal federal Medicaid expenditures and this population could have been covered through waiver only authority. The state will not be allowed to obtain budget neutrality “savings” from this authority. This population will not include a budget neutrality expenditure limit; however, the state is required to report total expenditures and member months in their demonstration monitoring reports, per STC 8.6. The state must report quarterly claims and report expenditures on the CMS 64.9 WAIVER form. Failure to report FFCY expenditures and member months will result in reinstatement of the budget neutrality requirement. CMS reserves the right to request budget neutrality worksheets, requirements, limits, and analyses from the state at any time, or whenever the state seeks a change to the demonstration, per STC 3.7.

11.2. Limit on Title XIX Funding. The state will be subject to limits on the amount of federal Medicaid funding the state may receive over the course of the demonstration approval. The budget neutrality expenditure limits are based on projections of the amount of FFP that the state would likely have received in the absence of the demonstration. The limit consists of one or more Hypothetical Budget Neutrality Tests, and a Capped Hypothetical Budget Neutrality Test as described below. CMS’s assessment of the state’s compliance with these tests will be based on the Schedule C CMS-64 Waiver Expenditure Report, which summarizes the expenditures reported by the state on the CMS-64 that pertain to the demonstration.

11.3. Risk. The budget neutrality expenditure limits are determined on either a per capita or aggregate basis as described in Table 3, Master MEG Chart and Table 4, MEG Detail for Expenditure and Member Month Reporting. If a per capita method is used, the state is at risk for the per capita cost of state plan and hypothetical populations, but not for the number of participants in the demonstration population. By providing FFP without regard to enrollment in the demonstration for all demonstration populations, CMS will not place the state at risk for changing economic conditions, however, by placing the state at risk for the per capita costs of